Ed Balls: Labour to cap child benefit rise for two years

Child benefit would see cuts for the first two years of a Labour government, Ed Balls is expected to announce.

The shadow chancellor will say that Labour will cap child benefit for at least two years. Credit: Julian Stratenschulte/DPA/Press Association Images

The shadow chancellor will present a 1% cap on rises in the help for parents as one of the "tough decisions" necessary to deal with the deficit if the party takes power next year - claiming it will save the taxpayer £400 million over five years.

He will seek to soften the blow by cutting ministers' pay by 5% and then freezing it until the party is able to "balance the books".

Addressing activists at the Opposition's final annual conference before the general election in May, he will vow not to "flinch from the tough decisions" needed to deal with the economy.

He will tell the Manchester gathering:

I want to see child benefit rising again in line with inflation in the next parliament.

But we will not spend money we cannot afford. So for the first two years of the next parliament we will cap the rise in child benefit at 1%.

It will save £400 million in the next parliament. And all the savings will go towards reducing the deficit.